If you and a business partner started your company together, you may consider the dissolution of that partnership to be the end of the business. If the two of you decide not to work together anymore, you will simply have to close your doors.
This can be necessary in some cases if both people were critical to the ongoing work that the business was doing. But it is important to remember that, even if your partner wants to leave, that does not necessarily mean you have to close your business. Instead, you can buy out their ownership share and move forward as the sole business owner on your own.
Compensation and debts
Exactly how this is handled depends on the business’s financial state.
For example, perhaps the company has been profitable. If it has a significant financial value, your partner will likely want compensation for their ownership share. Exactly what percentage they own should be addressed in your partnership agreement. You will have to buy them out by paying them the appropriate amount of compensation to cover that ownership, giving you full control of the business.
If they are leaving because the business is not profitable, however, the company might still hold significant financial debts. In a case like that, you may be the one pursuing financial assistance to pay off their portion of this debt. You do not want them to simply exit the partnership and leave you holding all of those obligations.
Naturally, however, your business structure also matters. If your company is an LLC, then you may not be personally responsible for the debt anyway. It belongs to the business itself.
Things can become complicated when addressing business structures, partnership agreements and contractual obligations. An experienced attorney can help you navigate this process.
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